When the going gets tough, the tough go shopping…but should they? Here's how to manage your retail therapy habits in our toughest year yet.

Remember the days when you’d bonk your head and get an “owie”? Did your parents rush to your side, give you a kiss, and “make it all better”? Did they slap on a bandaid — featuring a superhero or Disney princess — and round out the affair with an extra-large ice cream cone?

While you’ve likely graduated from Spiderman bandaids and soft serve (no shame, if not), buying treats and goodies to make up for a lousy day isn’t exclusively for kids. The shorthand for this behavior is “retail therapy,” and in the age of a pandemic, it’s become more prevalent than ever.

Some studies point to the positive effects of shopping to boost your mood, but today our financial stability — personally and nationally — is on precarious ground.

Read on for information about the pros and cons of retail therapy and seven alternatives to help you manage your spending and maintain sanity in our current chaos.

What is retail therapy?

Retail Therapy And COVID-19: How To Protect Your Budget During A Pandemic - What is retail therapy?

Retail therapy is exactly what it sounds like: shopping to make yourself feel better.

It may seem unusual to call buying a new pair of shoes or indulging in a box of donuts a form of “therapy,” but several studies have indicated retail therapy is a successful means of turning a sour mood sweet — especially when donuts are involved.

However, the same behavior can have the opposite effect in excess. When left unattended, retail therapy can dramatically damage your mental and financial wellbeing. Your stress leads you back to the (now virtual) shopping mall, which wrecks your budget, making you more stressed, eventually driving you back to the store, and so on.

Seven ways to manage your retail therapy habit

Retail Therapy And COVID-19: How To Protect Your Budget During A Pandemic - Seven ways to manage your retail therapy habit

Buying a cookie or cardigan can certainly brighten your day, but don’t let your budget go unchecked. Here are seven simple tips to help you keep your retail therapy habit under control.

1. Set a savings goal

Perhaps the greatest threat of retail therapy is damage to your budget. So, before you have a chance to wreck your financial health, set up some parameters to protect yourself.

Instead of succumbing to that Instagram ad, save the money you want to spend. Create a list of goods and experiences you want and set a savings goal for each. Keep your money in a high-yield savings account like the CIT Bank Savings Builder (when you’re earning 10x the national average in interest, frivolous spending will be a little less enticing). Every time you feel like splurging, refer to your list before you buy!

2. Use a card with cash back rewards

If you’re the type to spend $1,652 per year on retail therapy, find ways to make your shopping habits help your budget instead of harm it.

Consider making your purchases on a credit card that provides cash back rewards. Chase offers their Chase Freedom Flex℠ card, which offers a $200 bonus after you spend $500 on purchases in the first 3 months from account opening. You can also earn 5% back on travel when booked through Chase Ultimate Rewards® and on rotating bonus categories (up to $1,500 per quarter), and 3% cash back on dining (including takeout) and drugstore purchases.

3. Delay your purchase

Wandering down aisles or scrolling through inventory online is therapeutic for many of us. But, before you buy another random throw pillow (that’s not just me, right?), give yourself some time to mull it over.

Some resources suggest waiting 24 hours before making an unplanned purchase, while others recommend as many as three days. While the length of time is debatable, the action is an excellent means of protecting your budget from one too many impulse buys.

4. Invest instead

Another way to correct excessive shopping is by investing your spare change instead of trading it for temporary bliss, and today, investing on a small scale is easier than ever!

Public, for example, is a free investing app for investor newbies and wannabes. Public eliminates the barrier to entry by allowing people with small amounts of cash to buy fractional stocks in companies like Amazon and Google. If you don’t know much about investing, Public also offers a large community forum, where traders can share experiences and ask questions.

5. Exercise

Let’s get back to the root of the problem: you’re shopping because you’re experiencing stress. Though most won’t want to admit it, exercise is a proven means of reducing anxiety.

Next time you feel the urge to buy another new pair of shoes, go on a hike instead. Search for a HIIT workout or yoga routine on Youtube. Or, just crank up the tunes and dance your stress away!

6. Cleanse your inbox

While COVID-19 has certainly impacted our ability to shop in person, some Americans have simply redirected their shopping online, making every email with 15% off coupons, BOGO deals, and limited-time offers more dangerous than ever.

Do your future self a favor and click unsubscribe! Delete any apps that have sucked you into a shopping spree and, for the sake of your budget and your sanity, do not click on that ad!

7. Shop the sales rack

Remember the key to managing retail therapy habits is not elimination, it’s moderation.

When you do shop, consider ways to do so while protecting your financial health. Shop at thrift stores or limit yourself to sales and clearance racks. Take advantage of free services like Capital One Shopping, a free browser extension that locates coupon codes to help you save money on whatever you want to buy (you don’t even have to be a Capital One customer!). Limit yourself to good deals only, so you can splurge and save all at once!

Disclaimer - Capital One Shopping compensates us when you get the browser extension using the links we provided.

Is retail therapy the same as compulsive buying?

If retail therapy is drinking a glass of wine at the end of a long day at the office, compulsive buying disorder (CBD) is drinking the whole bottle…then repeating the routine every day after.

CBD, also known as shopping addiction or compulsive shopping afflicts 18 million American adults and can have severe consequences on an individual’s finances (according to Healthline).

To find out if you struggle with CBD, think about how shopping affects your mental and financial health. Do you often spend more money than your budget allows? Do you feel irritable or ashamed after shopping? Has shopping become an obsessive routine for you?

If your spending habits are masking a deeper struggle with anxiety or depression, a professional therapist can always provide healthier substitutes than handbags and Hersheys. Consider contacting the Shulman Center, which provides specialized counseling for compulsive shoppers, so you can beat your addiction and regain control of your cash.

What causes us to engage in retail therapy?

Retail Therapy And COVID-19: How To Protect Your Budget During A Pandemic - What causes us to turn to retail therapy?

Everyone has their favorite forms of treatment when stress interferes. Meditation, exercise, or even a good, old-fashioned cry. But, what is it about shopping that helps people cool down?

One study found that sadness occurs when an individual feels a lack of control, and shopping can help reduce that sadness by providing them with an opportunity to take charge once again (or, rather, to get charged). In other words, when life sends us spinning, we naturally search for opportunities to regain a sense of balance. Amy Morin, a psychotherapist, and author of 13 Things Mentally Strong People Don’t Do, says impulsive shopping

“gives you sort of a false sense of control in the moment.”

Shopping can also provide a quick fix for the lonely. Isolated individuals are tired, and for these folks, a trip to Target for a new pair of shoes is a simpler solution than maintaining friendships — not to mention building new ones. 

Is retail therapy always bad?

While shopping may be a simple bandaid for deep issues like loneliness, research has indicated retail therapy is a proven means of boosting your mood. 

In a study published by the Journal of Consumer Psychology, social experiments confirmed that shopping decisions helped reduce sadness. Another study revealed that retail therapy can have a lasting, positive impact on one’s mood. In the report, researchers claim their studies provide:

“evidence that the purchase of self-treats for mood repair is prevalent and that strategically engaging in retail therapy has many upside benefits.”

Nevertheless, like many joys in life, the key to healthy retail therapy is moderation. 

How has COVID-19 affected retail therapy trends?

Retail Therapy And COVID-19: How To Protect Your Budget During A Pandemic - How has COVID-19 affected retail therapy?

The coronavirus pandemic has robbed us of social norms, and many Americans have turned to shopping for solace. However, the loneliness that drives us has also distorted our judgment.

In January of 2020, the average U.S. citizen spent roughly $155 each month on impulse shopping; by April, the number had increased 18% to $182.98.

Isolation makes it harder for consumers to establish clear and specific goals when they shop, which undermines their physical or mental capacity to resist spontaneous buying impulses,” says Lan Wu, a marketing professor at Cal State East Bay.

Unfortunately, COVID-19 has also triggered an intense recession and widespread unemployment, and frivolous spending only intensifies our financial hardship. According to the U.S. Financial Health Pulse Trends Report, published in October of 2020, more than two-thirds of Americans are financially unhealthy, and millions are facing “extreme financial hardship.”

If you have struggled to maintain financial stability this year, click here for recommended strategies and resources from the Association for Financial Counseling & Planning Education.

How does retail therapy impact your budget?

In 2017, a survey conducted by Swap.com found that Americans spend an average of $1,652 per year on retail therapy.

Depending on your income, this number could sound excessive, minimal, or right on the money. However, when this same survey asked participants whether or not they were living paycheck-to-paycheck, seven out of ten responded “yes.”

Spending more than $130 a month on unplanned, unnecessary purchases when you need every penny just to maintain a living is not only unhealthy, it’s dangerous. Online counseling service platform Better Help says retail therapy can behave similarly to a drug addiction: you feel sad, so you spend, but then you realize you couldn’t really afford to splurge, so you feel guilty and distraught (similar to a withdrawal). To feel better, you spend more.

The cyclical nature of this problem has the potential to lead you deeper into debt and perhaps even depression. Consequently, it’s imperative that you find ways to manage your retail therapy habits before they have a chance to disrupt your mental and financial health. 

How to protect yourself from the dark side of retail therapy?

Psychologist Dr. Tracy Thomas, calls retail therapy by another name: “reactionary spending.”

She says impulsive purchases confine us to our immediate wants and circumstances. We’re mesmerized by shiny jewelry and sweet treats, distracted from our long-term aspirations. As a result, Dr. Thomas says reactionary spending prevents us from investing in the life we really want to live.

To correct this issue, Dr. Thomas encourages us to consider how our future selves would want us to spend. If you engage in a little retail therapy, make sure you’re buying something that matches your goals. Shop with intention and make your future self proud.


Though some research indicates retail therapy can provide positive effects on your mood, it can also perpetuate problems like loneliness, by distracting us from the source of our sadness. In addition, retail therapy poses a real threat to our budgets and our financial health as well — especially in our current economic climate.

Psychologist Dr. Tracy Thomas says retail therapy acts as a distraction, preventing you from pursuing the life you really want. Next time you feel the urge to splurge, consider how you can set your future self up for success! Instead of shopping whenever you have a bad day, channel that energy towards investing on a free app like Public or keep your funds in a high-yield savings account like CIT Bank’s Savings Builder, so you’re less tempted to spend.

Finally, if you choose to shop a little, make sure you’re protecting yourself from the cons of retail therapy by saving when you can. Find coupon codes or use the right credit card to make some of your money back.

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About the author

Photo of MoneyUnder30 writer Kate Van Pelt
Total Articles: 51
Kate Van Pelt is a writer and editor based in the Pacific Northwest. She has a bachelor’s degree in business management and English and has established her professional career in marketing and research writing. Since 2015, Kate has created educational materials covering a variety of financial topics, from home loans and credit cards to retirement accounts and estate planning. She spends her free time thrift shopping, making cocktails, and enjoying the outdoors with her dogs, Vira and Elmer.